‘The outbreak of the crisis took Japanese big business completely by surprise and it has not known how to react’

Workers in this country have been told one thing over and over again for the last decade: your only hope lies in following the Japanese path.

But it has not only been hard bitten managements that have embraced the ‘Japanese’ road. So too have economists of the Will Hutton and William Keagan sort, desperate for an alternative to monetarism and Thatcherism.

But the experience of workers in Japan should soon dispel any illusions among the serious left that much is to be gained by following this path.

Most people take it for granted that Japanese workers have very high living standards. And it is easy to misuse statistics to back up this impression. Gross national product per head at $23,801 in 1990 was actually higher than the US’s $22,062, while average male wages today, at 5 million yen a year, work out at twice the British level using current exchange rates.

But the impression is very deceptive. Prices of most things are much, much higher than in Europe or North America – with cans of beer costing about £2 each, apples about £1 each, coffee £3 a cup, beef £9 a pound and cabbage 60 pence a pound.

So real take home pay is probably about the same as in Britain. The Japanese statistical office’s estimate for 1990, based on the then exchange rates (before Black Wednesday, and the slump in the pound’s value compared with the yen) was that if hourly wage rates in Japan equalled 100, then those in Britain were 107 and those in West Germany were 156.

The same picture of Japanese workers’ living standards is borne out by other figures, so 80 percent of Japanese households have a car (the British figure is 66 percent) and 71 percent have a video recorder (64 percent in Britain). But the average home (taking into account the homes of the very rich) is only 85 square metres, rather less than an average two bedroomed council flat in Britain. To get these things Japanese workers have to put in considerably longer hours than those in Europe.

A worker in a steel factory near Osaka tells how he earns 1,600 yen an hour – just over £10 at the present rate of exchange – for a basic working week of 48 hours. Most of the workers there do two hours overtime a day. They start at 6 a.m. and end at 5 p.m., six days a week.

Government statistics show fewer than half of workers (45.9 percent) get a five day week every week, with nearly 30 percent being expected to work at least two Saturdays each month. The average holiday entitlement, including annual holidays and bank holidays, is 20 days a year. But many workers do not take their full entitlement – not, as it is often said, because Japanese workers are ‘workaholics’ but out of the need for overtime money and fear of being thought disloyal.

Companies have a free hand to impose long hours and high levels of productivity on the workforce. In return, workers who show ‘loyalty’ to the company can expect security of employment, discretionary annual bonuses equal to up to five months’ wages and pay packets by the time they are 55 years old that can be twice those for 25-year-olds in the same firm.

The result has been very beneficial for Japanese capitalism. It has been able to impose an enormous rate of exploitation, with manufacturing productivity rising by a third between 1985 and 1990 and gross accumulation regularly at 30 percent of GNP – a figure without comparison among the other advanced countries.

There are, however, two important differences between Japan and Europe. The first is that, for the moment, unemployment is considerably lower. This means there is much less of the visible poverty you find in Britain.

Secondly, the level of class struggle is also considerably lower. Thus the number of strike days in 1990 was about one tenth of the figure for Britain, and two fifths of the figure for Germany. What is more, the level of class struggle has been declining for a very long time. Strike days in 1990 were about a sixth of the figure for ten years before. The unionisation rate fell from 46 percent in 1950 to 25 percent in 1990 – and this includes the collaborationist company-wide unions that have dominated most of the manufacturing sector the late 1940s and early 1950s.

So why has there been so little fightback by Japanese workers? Partly it is because the lack of genuine unions in many plants means workers are literally in terror of being thought disloyal. But it is also because for most workers things are still much better than they used to be. Back in the early 1950s, when many of the present generation of workers grew up, living standards were almost at Third World levels. Real wages then grew every year except one between 1960 and 1990.

The growth in living standards was small compared with the massive accumulation of Japanese capitalism. It was, nevertheless, sufficient to avoid driving the mass of Japanese workers to rebel.

This leads to pessimism even among Japanese socialists, with some asking whether working class consciousness will ever change.

Yet the forces producing change are already at work. Real wage growth, which was 2.5 percent a year in the 1960s and a massive 7.5 percent a year in the early 1970s, fell to about 1 percent a year in the 1980s. And now Japan capitalism faces its most severe economic crisis since the Second World War.

The outbreak of the crisis two years ago took Japanese big business completely by surprise and it has not known how to react. Its inclination has been to hope that somehow the crisis will pass and to hold on to skilled labour in the interim. This means that so far it has avoided mass sackings, preferring enforced early retirement of workers in their fifties, a freeze on recruitment of school leavers, slashing of annual bonuses and cutbacks on overtime.

But such measures are almost certainly not enough to solve Japanese capitalism’s problems. It made huge investments in the late 1980s. Now it is desperate to make them profitable. It is difficult to see how it can achieve this without hitting Japanese workers much harder.

If the level of class struggle in Japan is low today, this was also true in West Germany through the 1960s, 1970s and early 1980s and for fairly similar reasons. Today things are already beginning to change in Germany as big business finds the social costs of the ‘social market’ too expensive to bear. Such developments will probably take place more slowly in Japan, but take place they will.